Oil Dragged Down Energy Subsector ETFs

In the week ending June 14, major energy subsector ETFs had the following performances:

• The Alerian MLP ETF (AMLP) fell 0.2%.
• The VanEck Vectors Oil Refiners ETF (CRAK) fell 0.5%.
• The VanEck Vectors Oil Services ETF (OIH) fell 2.9%.
• The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 3.4%.

Last week, US crude oil prices fell 2.7%, while natural gas active futures rose 2.1%. Oil downturn is an important factor for these ETFs’ price performance. Last week, the oil rig count fell to more than a one-year low, a negative development for the oilfield services subsector.

Moreover, in this period, Brent crude oil futures outperformed WTI crude oil active futures. The expansion in the Brent-WTI spread could have limited CRAK’s downturn. US downstream stocks account for 27.7% of CRAK.

Last week, the Energy Select Sector SPDR ETF (XLE) fell 0.4%. XLE had the highest decline among the sector-specific SPDR ETFs under review. Mixed sentiments in commodity prices might have dragged XLE. The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 2.3% and outperformed SPDR ETFs. Most of the sector-specific SPDR ETFs closed in the green last week.